Several banks have started exploring adoption of artificial intelligence (AI) and machine learning (ML) in their operational processes.
“There is substantial attention being paid in bank boardrooms nowadays on deployment of AI and ML,” Sreerama KV Murthy, Chief Executive Officer, Quadratic Insights, told BusinessLine. “A few banks have already initiated the process of building centralised data lakes and institutionalising advanced analytics capabilities, either internally or through captive vendors,” he added.
By adopting AI and ML, some banks have automated operational processes, resulting in cost reduction and faster turn-around time. Some non-banking finance companies (NBFCs), payments banks, insurance companies, investment advisory companies and online financial service providers are also looking to upgrade their processes.
According to Murthy, banking operations are highly process-oriented and data-intensive. For example, to open a bank account, a person submits a set of forms and supporting documents. The data in these are systematically scrutinised by the bank before approving the account opening.
Likewise in disbursals, there are systematic approval processes for providing personal, corporate, and agricultural loans.
“In addition, there are systematic and data-centric processes banks use for quantifying and minimising risk, customer support, hiring and retaining staff, detecting and blocking fraud, forecasting and avoiding delinquencies, and identifying existing and new customers for marketing of new products and services,” he explained. Murthy said Quadratyx is an IP-centric services company working in the space of AI, ML, big data and analytics.
The company so far has served, among others, State Bank of India, Bank of Baroda, HDFC Bank, Axis Bank, YES Bank, Kotak Mahindra Bank, Cibil, NPCI, Murugappa Group, Dr Reddy’s Labs, Novartis and AT&T. “It would not be unreasonable to predict that, within the next five years, most medium and large public and private banks in India will have substantial data science, AI and ML initiatives institutionalised,” said Murthy.